By Scott Newman
Many agents forget that barriers to getting deals to the closing table exist in both good and bad markets. We are seeing a lot of appraisal issues in the Chicagoland area as over-regulation and timidness on the part of appraisers to push values — despite undeniable appreciation — has resulted in many deals dying at the financing stage.
How do you avoid becoming one of the statistics? Follow my 3 practical tips below…
Know Thy Appraiser
The biggest mistake an agent can make is not meeting the appraiser at the property.
To assume that your appraiser is a true expert on that particular neighborhood, city, property type, etc. is foolish. You know what they say about people who assume!!
You need to be there — both agents should be present, in fact, to show solidarity. Make sure you walk that entire property with the appraiser and give him or her the comparables you feel best reflect the true value of the home. Also, follow up with them afterwards to make sure things are going smoothly.
Remember, lenders are no longer allowed to speak to the appraiser on their file, so you are the first and last line of defense in making sure someone who’s under-qualified doesn’t blow up your deal .
Know Thy Lender
Do you really know the person responsible for making sure your client’s money is ready on the day of closing? Far too few agents do a proper job consulting with their clients on the value of using a lender with proven experience and local market knowledge.
As a listing agent, I cannot tell you the number of times that a buyer’s agent told me that they have never even spoken to or e-mailed with their client’s lender, and that they are, essentially, blindly hoping that all is well.
If your client is absolutely adamant about using someone other than the lenders you refer business to, pick up the phone and call this person and make sure they actually did a thorough job qualifying your clients. Continue to follow up consistently through closing to make sure they are on top of things.
Know Thy Client
You need to make sure that your client’s unique financial circumstances jive with what they are trying to buy. For example, if your client only has 10 percent to put down and wants to buy in a co-op in downtown Chicago, then you’re probably out of luck as most want at least 30 percent down.
Imagine the disappointment in your client’s face when they find out that not only can they not buy the home of their dreams, but that you’ve also wasted countless hours of their valuable time by not taking the time to make sure their financials lined up with the realities of the current market.
Remember, just because the market is recovering and appreciating doesn’t mean all the fundamentals of being a good real estate agent should go out the window. Financing is as difficult as ever and the rules change everyday. Stay ahead of the curve by being pro-active. You’ll benefit by having more of your deals make it to the closing table.
Scott Newman is the broker-owner of Newman Realty in Chicago. Connect with Scott at www.newmanknowschicago.com or @newmanrealty.